CZK: EURCZK Pares Gains After Brief Test of April High

EURCZK has reversed earlier gains after a brief test above the April high of 25.448 at the start of the session. That placed the cross within close proximity to its YTD high of 25.519.

• The reversal lower broadly coincided with the release of Holub’s interview to E15, in which the Board member said the prospect of 25bp rate cuts in each of the remaining four meetings of the year are “realistic”. That compares to the 50bp rate cuts delivered at each of the previous four meetings. Last month, the CNB voted 5-2 in favour of a 50bp cut (Holub himself voted for 50bps).
• The initial move higher for EURCZK this morning followed similar moves in EURHUF and EURPLN after disappointing PMI figures in Europe prompted weakness in the euro. Moreover, the recent risk-off tone across markets has been underpinned by softer global equities softer following some disappointing tech earnings after-markets yesterday and subdued sentiment in China.